The global super-rich have taken an estimated 4 per cent hit to their collective worth over the year-to-date following a bumper 2021, according to the latest Capgemini annual survey.
“While 2021 was a strong growth year, 2022 is already turning out to be significantly different,” the Capgemini report says. “High inflation since the start of 2022 and talk about interest rate hikes from central banks have spurred stock market corrections that are accelerating.
“As a result, as of the end of April 2022, our estimates indicate that global HNWI [high-net-worth investor] wealth had declined by ~4% (versus December 31, 2021).”
The long-running Capgemini wealth survey also found the number of ultra-HNWIs – or those boasting over US$30 million of net assets – surged by 9.6 per cent last year to reach a total population of more than 220,000.
Ultra-HNWIs represent 1 per cent of the world’s richest people while controlling 34 per cent of the wealth among the elite groups.
However, the one-percenters saw their wealth expand at a slower rate than second-tier rich (US$5 million to US$30 million) with respective growth of 8.1 and 8.4 per cent in 2021.
Run-of-the-mill millionaires (in the US$1 million to US$5 million range) reported asset growth of 7.8 per cent last year and population growth of 7.7 per cent, bringing the global cohort to more than 20 million people.
The US retained its spot as the spiritual home of the uber-wealthy, reporting almost 7.5 million members of the exclusive club in 2021, up from about 6.6 million the previous year.
Japan, Germany and China follow the US in the HNWI population rankings with Australia 11th in the rich-list, the Capgemini report shows.
The study notes wealthy investors generally stuck with traditional asset allocations in 2021 but were becoming alt-curious.
“… they demonstrated measurable interest in emerging asset classes – especially ESG and digital – and vocalized their desire for better digital and personalized offerings from [wealth management] firms,” the report says. “Family offices witnessed increased demand from HNWIs due to better life-stage understanding and emotional connections.”
As well, the Capgemini survey flagged niches including “millennials, women, tech-wealth, LGBTQ+ individuals, and the mass affluent” as attractive targets for wealth management firms.
“But to capture this growth, firms will need new business models and new and improved ways of delivering more personalized and responsive service, augmenting overall client experience,” the report says.
Anirbarn Bose, Capgemini financial services unit chief, says in the study many wealth management firms are “missing the boat” in the emerging HNWI sectors.
For example, Bose says “while we believe the sizeable mass-affluent segment offers lucrative potential, only 27% of firms say they actively pursue these prospects”.
Amid fast-changing global markets and new demands from the rich, the Capgemini study says wealth management firms will need to “implement a comprehensive four-dimensional engagement strategy” to thrive, covering factors such as:
- new “human-centric” business models;
- creating an “inclusive ecosystem” designed to capture the embryonic rich;
- shoring-up advisory skills and productivity to ensure top-level client experience; and,
- developing a “one-stop shop” approach to deliver all HNWI services.
The 2022 survey included responses from almost 3,000 high-net-worth investors across 24 jurisdictions.
Capgemini is a global consultancy firm focusing in technology-enabled business support.